9 Passive Income Business Ideas
One thing is certain, no one hates making extra money, especially if making that money becomes passive enough for you not to have to do much. Regardless of your current job or profession, raking in a few extra bucks passively can help supplement your income immensely.
What business ideas can help me earn passive income? There are tons of business ideas that can earn you money passively. It doesn’t matter what profession or job you are in. All you need is a little commitment, capital, and to actually set it up to be passive. Some of the passive income business ideas include running an ATM machine business, Laundromat, Food Truck, Vending Machines etc. Your choice depends on what you love and are able to do.
I started out as a legal intern in a busy law firm. But I have always had a passion for writing so I run a freelance writing service site on the side. A few months down the line, I couldn’t believe the amount of money I was making passively! I realized I would’ve made more money if I knew other passive income ideas like the ones on this page on our site. This article gets a little more into that. If the risks involved with these types of businesses frightens you a bit, you may be more interested in our other passive income ideas.
In this article, we will uncover nine business ideas, that, if built to be passive, can provide incredible passive income streams. You will need capital to start most of them so check out our other passive income ideas if you have no money to invest. For more details about each specific idea, you can learn more in each particular guide on our blog by clicking on the orange button or the adjacent image. Let’s get started
You can earn passive income by buying and running an ATM machine. The ATM business has been growing since 2008 with national average fees reaching $4.35 in the US in 2014 (source). ATM fees are split amongst parties (ATM owner, venue owner, and ATM processor). All you need is an ATM machine, a venue with high traffic, and a reliable ATM processing service provider to get started. The ATM processor (the company that handles paperwork and processing) shares out the fees at an agreed ratio). According to Caremon Kong from Forbes, the processor earns a percentage of the fee or $0.10 to $0.50 per transaction (source). A venue owner earns about $0.50 per transaction and then you (ATM owner) receive the remaining balance.
How much passive income can you make from an ATM Machine? Location is (almost) everything. But, ATM customers withdraw $60 (on average) per transaction (source). If your ATM machine has 8-10 transactions every day, this could mean up to $600 is withdrawn daily, and the ATM owner would make $24. Assuming you collect ($3 as ATM fees per transaction) and pay the processor ($1.80 per transaction) and venue owner ($0.50 per transaction). The total transaction fees come to about $4 making your gross profit ($24-$4) = $20/daily. You generate $600 monthly and $7,200 annually. Although the idea may require a lot of capital to start (source), it offers good return on investment (ROI) for little work.
2. Flipping Cars
How much passive income can you make from Flipping Cars? Depending on the number of cars you sell and the clients you have, you can earn $3,000. Assuming you buy a $500 car in excellent condition and sell it for $1,500 – you make $1,000 from one car! If you sell only 3 cars in a month, you rake in $3000 passive income. To maintain a good passive income stream by flipping cars, ensure you look for fast-reselling models, vehicles in the best condition possible, and maintain car-selling ethics to provide yourself good referrals. If you want to make this business passive, you will have to hire someone to outsource the work.
3. Self/Automatic Service Carwash
How much passive income can you make from Automated Car Washes? You have to undertake many steps to start and run a successful car wash and your location is one of the most important aspects. So long as you are located in a busy spot and offer quality cleaning services, this business makes an impressive passive income stream. Although the initial stages are demanding and challenging, a well-run automated car wash business can earn you up to 900K/year (source).
4. Selling Ice-Cream
How much passive income can you make from Selling Ice-Cream? You can make over $1000 monthly as passive income off an ice cream truck business. Everything depends on your location, your ice cream varieties, service quality and your customer base. There are many ice cream companies and vendors so you have to consider these factors before getting into the business. Seasonality may also be an issue. This idea requires a considerable amount of capital (for the truck, equipment, and ice cream flavors) and higher levels of commitment to start. After you establish a well-run ice cream business, you can earn passive income from it while if you hire someone to do the selling and to take care of inventory. Ice cream trucks gross an average of $15K-30K annually making it a profitable passive income stream for beginners (source).
You may need to hire someone to open and close the place, unless you want it to be open 24/7, in which case security will be an important factor to take into consideration. You could setup security cameras that you have remote access to and have a cleaning company report back to you after cleaning the place to make it as passive as possible. In the US, laundry facilities and dry-cleaning services market valuation stood at a whopping $10.2 billion in 2016, making it a viable passive income business idea (source).
How much passive income can you make from a Laundromat Business? Depending on the size of the business and number of clients you serve, a well-run Laundromat can earn you $30K to $1million annually (source). There are many stories of people who successfully run a passive laundromat businesses. Many like Laura from Laundromats101 (source) have shared their experiences about the industry and how you can make money passively from it (source). Although the business requires high capital to start and run, it offers a high ROI when well located, and can be started with little experience. This makes it a profitable business idea that can help you create a consistent passive income stream easily.
6. Vending Machines
How much passive income can you make from a Vending Machine Business? Depending on the product/service you are selling, a well-run vending machine business can earn you over $100/weekly (souce). All you need is a good location and a niche product. If your business is located close to a school, for example, you can benefit from vending student material like stationery, candy & treats, drinks etc. The business may require high capital to start, but it offers good returns on invested capital making it a passive income source worth trying.
7. Game Machines (Arcade)
How much passive income can you make from a Game Arcade Business? It all depends on the kind of games you offer and the location of your business. A well-run game arcade business can earn up to $1,000 monthly (source). To earn more clients and make your business profitable, ensure you offer other services in your game arcade. You can have a food joint, bar, restaurant etc. to maintain your customer as they wait their turn on the machines. The initial costs of starting a gaming arcade may be huge, but the returns on investment are equally good. You have to consider factors like space, machines, equipment etc. that costs a lot of money (source).
8. Food Truck
This idea greatly resembles the ice cream truck business. The difference is that you’ll be selling food instead of ice cream to your customers. Unlike ice cream trucks, food truck business can help you rake in even more money passively. According to IBIS World, the food truck industry recorded over 6.8% growth in the last 5 years making it a viable way of earning money passively (source). There are many different types of food trucks on the market depending on what you intend to serve your customers. Of course, to make it more passive you would have to hire someone to stock, make and serve the food.
How much passive income can you make from a Food Truck Business? Depending on the type of food you sell, your location, and the size of your client base, your business can make you hundreds of dollars passively every day (source). The business requires a huge capital investment – considering a food truck costs approx. $15,000. But if it’s well-run and marketed, it offers high returns on investment within a short time. A successful food truck business can gross up to $300K in yearly revenues (source), making it a passive income business idea worth trying if you are passionate about mobile restoration.
9. Self Service Storage
Investing in self-storage facilities can be a profitable way of earning passive income. The best part? You earn lots of money without experiencing the headaches of tenants or broken toilets. Regardless of the economic situation, people will always require storage with 1 in every 10 Americans using self-storage facilities (source). Over 80% of the businesses in this $220 Billion industry are owned by “mom and pop” operators (source), which makes it a passive income idea worth trying.
How much passive income can you make from a Self-Service Storage Business? The success of your self-storage business depends on the size of your storage facility, it’s location, and the number of clients your serve. If well-run, the business can create a viable passive income stream and gross $300K-$700K every year (source).
How do I know the Ideal Passive Income Business Idea for me? There is no ‘ideal passive income idea.’ The passive income idea you choose depends on what you would like to do, what you are able to do, and what you can do depending on time, dedication, skill and capital. Have a look at our other passive income ideas and guides for more inspiration.
Can you combine Passive Income Business Ideas? Yes you can combine passive income ideas. You can do two or more ideas simultaneously and earn more money passively. For example, you can have vending machines in a laundromat to not only provide a better experience for your customers, but also boost your income. If you have the capital to start and run two ideas together, why not. You make more income that is passive easily and over a long period.
Which is the most profitable idea from the above? Every idea requires different amounts of capital to start and run. Flipping cars is the most affordable idea with a decent return on investment. However, ideas like running a food truck business can be costly, but the returns can be very high.
What are passive income business ideas?
- Flipping Cars
- Self/Automatic Service Carwash
- Selling Ice Cream
- Vending Machines
- Arcade Game Machines
- Food Truck
- Self Service Storage